* SSEC 0.9%, CSI300 1.2%, HSI 1.0%

SHANGHAI, May 8 (Reuters) - China and Hong Kong stocks rallied on Friday after Beijing further opened up its financial markets to foreign investors and as talks between U.S. and Chinese trade officials lifted sentiment.

** At the midday break, the Shanghai Composite index was up 0.91% at 2,897.74 points.

** China’s blue-chip CSI300 index was up 1.15%, with its financial sector sub-index higher by 1.05%, the consumer staples sector up 0.81%, the real estate index up 0.86% and the healthcare sub-index up 1.32%.

** Chinese H-shares listed in Hong Kong rose 1.17% to 9,878.7, while the Hang Seng Index was up 0.99% at 24,218.16.

** The smaller Shenzhen index was up 1.21% and the start-up board ChiNext Composite index was higher by 1.05%.

** China finalised rules on Thursday that would scrap quotas under two major inbound investment schemes, giving qualified foreign institutions unlimited access to Chinese stocks and bonds in the latest step to open the country’s financial industry.

** “It is poetry in motion for me to watch the Chinese move on approving the significantly revised regulations ... at the very same moment Washington is looking to coax U.S. institutions to refrain from allocating capital into RMB asset classes,” said Peter Alexander, managing director of Z-Ben Advisors.

** Also providing support was news that top U.S. and Chinese trade representatives discussed their Phase 1 trade deal on Friday with China saying they agreed to improve the atmosphere for its implementation and the United States saying both sides expected obligations to be met.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 1.28% while Japan’s Nikkei index was up 2.03%.

** The yuan was quoted at 7.0746 per U.S. dollar, 0.15% firmer than the previous close of 7.085.

** As of 04:04 GMT, China’s A-shares were trading at a premium of 27.06% over the Hong Kong-listed H-shares.